The £424m trust told shareholders that British Assets would become a higher conviction vehicle, following a review of its management since current steward Phil Doel took over from Julie Dent, who ran the trust between February 2007 and September 2011.
Over the five years between December 2008 and June 2013 the global growth and income trust outperformed its benchmark but languished close to the bottom of its sector league. Over three years, the trust has clocked up a share price gain of 25.6%, but this is still beneath the 36.3% rise in its FTSE World comparator index.
Speaking to investors, the board of British Assets said that while the vehicle’s manager Doel would continue to invest primarily in UK listed equities, the number of holdings in the trust would be cut and run as a single portfolio, rather than as a series of sub-portfolios.
Moreover, despite having taken a quantitative approach to stock selection since 2006, the board said British Assets said it would draw on the skills of a wider investment team and make use of fundamental research to pick holdings.
“The board believes that this change will result in improved long term performance for our shareholders, whilst recognising there may be higher levels of volatility in short term returns,” the trust’s directors said.
“Simplification of the portfolio enables the managers to give suitable prominence to their individual best ideas to reflect their levels of conviction in those ideas in a simple, timely and meaningful fashion. This revised approach will be consistent across all the company's investments. It will also allow the managers to enact top down strategy views in a more precise and effective manner.”
